World Water Week: Competitors Must Collaborate on Water Risk Management

World Water Week is well underway, and as thousands of experts, decision-makers and professionals descend on Stockholm to collaborate on pressing global water issues, the private sector plays a larger role in the conversation than ever. More than 24 sessions dedicated to business show that the week’s theme of collaboration and partnerships can apply to profit-driven enterprises.

As Coca-Cola, Unilever, SABMiller, H&M and Borealis, among others, gathered on Monday afternoon to discuss Taking Collaboration to the Next Level with a packed audience, one message stood out: the business case has been made, it’s time to work with competitors to drive real change that has real positive impacts on the bottom line.

Competitors, unlikely partners

In water, shared risk is shared responsibility. But doesn’t competition stifle collaboration on that responsibility? Coca-Cola, SABMiller, H&M and Borealis all say just the opposite. David Grant, Senior Manager of Water Risk & Partnerships at SABMiller, highlighted three points for turning competitors into collaborators:

In reality, global competitors nearly always share watersheds, riparian areas, floodplains and other water resources. For example, if a company has a high flood risk at a plant in Indonesia or a severe drought risk in Arizona, their direct competitor has that same risk for their Indonesia and Arizona operations.

When a company recognizes a particular water risk, it will need to develop a project to manage that risk. An improvement in water management in that watershed will benefit your competitor regardless of whether they are involved or not, so why not engage them? A competitor can help shoulder the burden of a risk mitigation project and consequently the scope of impact may be significantly increased.

Government engagement is a necessity in water management, from working on municipal regulations to allocating scarce resources, and collaborations can facilitate and streamline engagement. In SABMiller’s experience, Grant said, “Governments are loathe to work with individual companies, and are much more apt to talk with collaborators” on water issues in particular. For example, when monsoons hit a SABMiller facility in India, water supply was cut by 70 percent. Because the company was able to demonstrate collaboration with other operations in the area, the government was more flexible and open to reaching a solution together.

Water running uphill: The supply chain

The panelists at World Water Week all agreed that the business case for water stewardship and management has been made and accepted within their own company walls. But who do businesses still need to convince that water stewardship is vital to business success? Moderator Stewart Orr, Head of Water Stewardship for WWF, pushed Greg Koch, Global Water Stewardship Director for Coca-Cola, on his supply chain (see this previous 3p post on Coca-Cola’s partnerships).

While Coca-Cola may fully understand water risk, what about its suppliers? Koch explained that while his plants and the surrounding communities understand water stewardship, Coca-Cola struggles with water in its massive supply chain. Coca-Cola’s supply chain, Koch explained, is the largest consumer of food in the world, including serving as the largest purchaser of sugar cane, the second largest purchaser of tea and third largest purchaser of coffee in the world. Significant dialogue is required to show those suppliers the water risk implicit in their operations, and partnering with other purchasers, including Pepsico, is often the only way to drive change.

Reaching scale

Long-term water sustainability is dependent on reaching scale. Coca-Cola is the fourth-largest employer in the world. If they achieve water sustainability within their company, they will have achieved considerable scale. Coca-Cola has partnered with WWF to work toward this commendable goal.

Koch then raised a vitally important question: while Coca-Cola is the largest purchaser of sugar cane in the world, they only purchase 2 percent of the world wide supply. What about the other 98 percent?

As Koch said, “We are not going to be transformative unless we lose our egos and have multiple entities working together.”

______________________________ Sara Drexler (@drexsa) is a graduate student at the University of Pennsylvania working toward a Master of Environmental Studies degree with an emphasis in Corporate Sustainability. Previously, Sara was the Sustainability Analyst intern at FMC Corporation, a diversified specialty chemicals company serving agricultural, industrial and consumer products markets. She worked with FMC’s metrics and reporting system to develop the company’s future approach to external assurance on its sustainability reporting. She received her undergraduate degree from Colgate University. Sara is an avid backpacker, food lover and runner, and a proud Philadelphian.